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Insurance for small businesses: What should be covered?

Insurance for small businesses: What should be covered?

Small firms contribute to more than 40% of South Africa’s gr...

Forward-thinking solutions to financial compliance woes

Forward-thinking solutions to financial compliance woes

According to a recent international survey conducted by Long...

Before you claim - know your facts

Before you claim - know your facts

Is buying insurance products simply a leap of faith? Persona...

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Thursday, 20 February 2014 11:09

What can we expect from the 2014 budget?

What can we expect from the 2014 budget?

The Minister of Finance will present this year’s budget on 26 February, and as we move closer to this date the burning question that every employee would like to know the answer to is whether personal tax rates will go up or down.  Of course, the people who know what’s in the budget aren’t talking, so we have to make an educated guess at what we can expect. 


The only way to do that is to pick up trends by looking back at last year’s budget.  The 2013 budget proposed a number of changes to some important areas of employment, of which the following are the bigger projects.


Retirement Reforms

South Africa does not have a statutory requirement for pension provision, or death and disability insurance. Government is examining ways in which every working South African can be guaranteed access to these components of social security. As in many other countries, a key element of this reform would be the provision of subsidised contributions for low-income workers.


In the absence of a statutory requirement for retirement provision, a large number of employers provide retirement and insurance funds as a condition of employment.


Pension, Provident and Retirement Annuity funds (Retirement funds) have their own unique tax and administration rules.  This causes unnecessary complications, mistakes and inefficiencies for everybody concerned. 


Proposals were made in the 2013 budget to ‘harmonise’ the tax rules into one standard set of administration and taxing rules for all retirement funds.  These proposals were promulgated late in 2013 and are included in the Income Tax Act but with an effective date of March 2015.


This is both a complex and a sensitive area of employment, and I have no doubt that changes will be made as we move forward to correct any unintended consequences that might arise, and to refine the provisions even further.


National Health Insurance

Late in 2012, Minister of Finance Pravin Gordhan stated at a press briefing that a discussion document on financing options for the NHI was at an advanced stage, but declined to give details or a date when National Treasury would make the document available.


This discussion document, which has still not yet been issued, will presumably address what we want to know –

  1. How is the NHI going to be funded?
  2. Will employees have to contribute?
  3. Will it be administered through the payroll?


There was also no mention of the funding mechanism for NHI in the 2013 budget proposals, so all we have is what was proposed in previous budgets -

  1. A special tax on high income earners, or
  2. A mandatory contribution by all employees (administered through the payroll), or
  3. An increase to VAT.


While the NHI has moved out of the spotlight in recent times, one expects this year’s budget to take matters forward, otherwise the proposed 14 year project might just become a 20 year project.


Youth Wage Subsidy (Employment Tax Incentive Act)

After the State of Nation address in 2013, when questioned in Parliament on the Youth Wage Subsidy, the President said that:


“The matter would be left to the National Economic Development and Labour Council to bridge consensus on youth employment interventions”.


This was followed in the budget with a reference to an administratively simple incentive that will create a graduated (sliding scale) tax incentive at the entry-level wage, falling to zero when reaching the personal income tax threshold.


After years of wrangling, the Youth Wage Subsidy was suddenly back in favour.


It was specifically mentioned (as a response to the objections to this scheme over the years), that protection will be provided by existing labour legislation combined with oversight by SARS and the Department of Labour to prevent displacement of older workers by younger subsidised workers.


All of this has of course come to pass. 


On the 20September 2013, the draft Employment Tax Incentive Bill was issued for a very short period of public comment, and was then moved at an incredible pace through the Parliamentary process, culminating in the State President signing it into law only three months later on 20 December 2013.


The Employment Tax Incentive Act is effective from January 2014, and encourages employers to employ youngsters between the ages of 18 and 29 by reducing the PAYE that the employer has withheld and which is payable to SARS, thereby reducing the cost of employment.  The young person will benefit from having a job, and the country will benefit by slowly reversing the negative cycle of social instability resulting from large numbers of unemployed young people.


The legislation envisages a three period which could be extended if necessary.  There will no doubt be changes proposed in the budget to improve the effectiveness of the provisions, which considering the very short space of time, was a commendable effort made by the legislators.


For the benefit of the country as a whole, it is hoped that employers will embrace the incentive, and where possible, hire beyond what they might otherwise have done.  Under certain circumstances, two youngsters can be hired for the same cost of hiring one.


Personal Tax

As far as increasing tax rates is concerned, the general expectation is that tax rates will be lowered, but only enough to cater for inflation increases to remuneration, or ‘bracket creep’ as it is called. 


In 2013, the personal income tax relief for individuals amounted to R7 billion.  In our current times of financial stress, one wonders whether this can be repeated in 2014.


Income protection policies: tax deduction for premiums to be abolished from 1 March 2015

Employees earning remuneration are generally prohibited from claiming tax deductions for any expenditure other than those items listed in section 23(m) of the Income Tax Act (58 of 1962). This is in contrast to persons carrying on a trade independently of an employer.


One of the few deductions still available to employees is for premiums paid on income protection insurance policies. Currently, such premiums are deductible if (a) the policy covers the person against loss of income as a result of illness, injury, disability or unemployment, and (b) the amounts payable in terms of the policy constitute or will constitute income. The general principle has been that the premiums will be deductible if the proceeds are taxable – for example, if the policy pays a salary replacement annuity to the policyholder in the event that he/she is no longer able to earn a living. The deduction available for these premiums is, however, an exception to the general rule that personal expenditure is non-deductible, on the basis that these premiums incurred may, in fact, produce taxable income (and therefore passes the section 11(a) general deduction test).

Published in Tax
Can you account for the value of data in your business?

While IT staff talk about 'data as an asset' rather glibly in the boardroom, the value of digital information in an organisation is interpreted quite differently from the accounting department's perspective. Traditionally data could be quantified in terms of traditional storage, backup, data recovery and in-house management costs, but there are questions abound about its actual recognition as a value asset in the field of accounting. How do you manage data from a tax perspective? How do you measure the value of data throughout its useful life cycle? Importantly, how do you credibly depreciate these data assets on the balance sheet?

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Published in Analytics & BI
Thursday, 21 February 2013 11:42

Clarity needed on Transfer Pricing Practice Note

Clarity needed on Transfer Pricing Practice Note

The South African Institute of Chartered Accountants (SAICA) hopes that mention will be made on how the uncertainty over transfer pricing should be dealt with in the national budget to be presented by Minister Pravin Gordhan on 27 of this month, as the current circumstances cannot continue without significant challenges for business.

Published in Financial Reporting
Tuesday, 27 November 2012 11:37

Governments get aggressive in acquiring cash

Governments get aggressive in acquiring cash

Measures taken by governments and powerful national institutions to channel resources to the government that would not otherwise go there is known as financial repression. Historically, governments deployed financial repression to liquidate severe debt levels, like after World War II for example. Yet the command economy style of financial repression, not only offends liberal free market sensibilities but also impacts on the ability of investors to achieve real returns in affected asset classes.


While the term financial repression was only coined in the 1970s, and then used to describe emerging markets, today it is again back in vogue - this time applying more specifically to the developed world.


The last major period of financial repression, typified by significantly negative real interest rates, lasted from the end of World War II in 1945 until 1980 - a period of some 35 years.


Certainly, “given the length of time for which financial repression can be applied, the revival of the phenomenon is both important and alarming for investors in general” says Glenn Silverman, Chief Investment officer, Investment Solutions.


As such, “understanding the mechanisms of financial repression, as well as how to successfully manage ones investments in an age of financial repression, will be increasingly important going forward" adds Silverman.


Ways that governments and their related national institutions employ financial repression include:


  • Taxes - a necessary and very evident 'evil'. Taxes can, however, become repressive when very extreme in either quantum (rate), and/or extent (breadth);
  • Exchange controls – restricting flows of capital, by captive locals, to offshore destinations;
  • Rent controls – the state artificially sets a maximum price for property rentals;
  • Prescribed assets – for example, pension funds and financial institutions in southern Europe are increasingly compelled, by law, to purchase bonds of the state that they are resident in, irrespective of whether they would wish to or not;
  • Monetary policy – using inflation or negative interest rates e.g. ZIRP (Zero Interest Rate Policies), to erode debt, punishing savers and rewarding borrowers;
  • Other possible examples might include quantitative easing, Basel 3, LTROs (Long Term Refinancing Operations), and the like;
  • National industrial policy and red tape can also be considered forms of financial repression when so extreme that they affect normal capital flows or business decisions.


Modern democracy in the West has become an auction, where the person or party chosen is typically the one offering more goodies to the electorate. In many countries these promises have become too large and are, quite simply, un-payable. 


"This is what we term the crisis of the welfare state, with Europe in particular, a prime culprit. In addition, in too many countries governments have simply become too large a proportion of the economy. This is not healthy” says Silverman.


Studies show that an optimal level of government involvement in an economy, unadjusted for differences in quality or delivery, is around 25%. Countries that exceed this by a large margin, with France for example now at over 50%, have a real problem, “as the level of government involvement becomes larger than the productive tax base that exists to support that government. This is clearly unsustainable over the long term” says Silverman.


Default is not an impossibility either. Studies by Reinhardt & Rogoff show that since the 1800s, at any one time, between 5% and 45% of all countries are either in default or are re-structuring their debt. This proves that “even governments are not immune to the laws of economics” says Silverman. With US government debt currently at $16.3trn (very close to the debt ceiling level), and growing by almost $4bn per day, more measures and policies designed to delay default, or kick the can down the road can be expected. “Even if the can is now becoming too heavy to kick very far” adds Silverman.


In the meantime, financial repression in various guises is set to become the reality for years to come.


Yet, since there have been extended periods of financial repression in the twentieth century, “history has taught us a few survival tips” says Silverman. 


Firstly, intellectual skills and the industries and products they spawn are safer havens, because they are mobile. It is far easier for governments to control fixed assets, like mines and mineral resources, making them ever-more risky assets in an age of financial repression. 


Secondly, spreading investments over several jurisdictions is important. Not only does this reduce exposure to a single repressive jurisdiction, but in an era of financial repression certain jurisdictions will be less restrictive than others. Less restrictive jurisdictions will tend to attract investment and show growth.


Thirdly, even during lengthy periods of financial repression there are booms (up cycles) and busts. Opportunities for profit exist for those who are nimble. Generally the rule here is to avoid assets that depend on confidence, “like fiat currency (cash) and government bonds, with a preferred focus on assets with yield, growth and quality/solvency” explains Silverman. These would include equities, property, precious metals, and industrial, manufacturing and technology businesses. “There may be advantages to being in the unlisted components of these too, like unlisted property for example, as these may be less susceptible to the volatility and de-rating risks that a period of financial repression may entail” adds Silverman.


Finally, within equities, two areas stand out as offering opportunity within a financially repressive environment, namely; emerging market equities with their better valuations and economic fundamentals (lower debt, more growth, younger populations etc), as well as those quality equity counters capable of producing a growing dividend steam.


In short, “in periods of financial repression when yields are very low or even negative, companies that can produce a growing dividend have typically been well rewarded. Now is no exception” says Silverman.


As such, periods of financial repression require a more active rather than passive investment approach, with more flexible asset allocation a huge benefit, as well as a focus on hard assets. As such, it is important that investors understand the environment that faces them, and adjust their thinking, portfolios and strategies to manage many of the threats increasingly evident in this post financial crisis world order.

Published in Trade & Investment
Monday, 05 November 2012 00:00

Failure to manage VAT adequately can have an effect on a company’s bottom line

Failure to manage VAT adequately can have an effect on a company’s bottom line

Value-Added Tax (VAT) is fast emerging as the tax of the future, with governments worldwide shifting their focus from direct taxes to indirect taxes in the wake of the recent economic uncertainty. Rising budget deficits have placed pressure on many governments to look to raise additional forms of revenue, and they are increasingly turning to indirect taxes as the solution.


These are some of the highlights from PwC’s inaugural edition ‘Charting the changes, 21 years of VAT in SA’, which outlines the numerous reforms that have taken place in South Africa and on the African continent over the period as well as some of the challenges that lie ahead for the market.

Charles de Wet, PwC National Leader for Indirect Tax, says: “Indirect tax policies, legislation and compliance with the law are all under increasing scrutiny from governments and tax authorities.


“From a risk management perspective, it is important that VAT be managed properly as it can become a huge expense for a company if it is not correctly accounted for.” De Wet says that minor errors and flaws can have a cumulative effect where the volume of transactions is significant. Furthermore, if the VAT process is not adequately managed, it can have an effect on an organisation’s bottom line and even disrupt procedures and processes.

“Companies face significant compliance risk coupled with hefty penalties and interest levied by the tax authorities, as well as disruption to businesses and increasing reputational risk.”


Worldwide the efforts of governments to improve tax compliance have also placed increasing pressure on companies to put risk management high on the board’s agenda, he says. “The tax function needs to assume more responsibility for tax than the finance function of the organisation. Clear policies need to be put in place as to how the VAT function should be managed.”


Tax departments have up to now tended to focus their attention on direct taxes. “This will have to change with the emphasis being placed on VAT and indirect taxes,” says De Wet. “Organisations need to put adequate and efficient resources, processes and technology in place to manage VAT challenges.

“On the face of it, VAT may seem a simple and acceptable tax to businesses as it is passed on to the consumer. However, there is an invisible cost to organisations which is extremely high and burdensome, namely that of compliance with the law.”


De Wet says although the basic principles of VAT are similar in most countries, the administrative practices, and rules and regulations applied tend to differ which can affect the compliance burden for businesses. VAT returns are required at different frequencies; monthly, bi-monthly, or quarterly, he explains. “This will have a significant effect on how long it takes a business to comply with VAT.”


South Africa is considered to have one of the highest VAT burdens in the world, according to research carried out by PwC Tax Services. It takes far longer for companies to comply with the VAT laws than corporate income tax. Companies have to complete three tax returns for company tax purposes. Organisations with an annual income of more than R1 million have to complete 12 tax returns for VAT purposes.


The PwC report highlights the increasing focus on improving the administration of VAT, including the use of electronic filing of VAT returns and reducing the compliance burden on the taxpayer, with the report drawing on data gathered from analysts across the PwC Southern Africa indirect taxes network.


To date VAT has been implemented in 151 economies worldwide.  De Wet says there is no VAT system in the world without flaws if one has to carry out a comparison and review of such systems. “There is a need for the tax authorities to eliminate non-compliance with the laws and fraud.” Established VAT systems such as those in the European Union appear to have fewer opportunities for fraud and higher levels of compliance than those introduced in the past decade.

Other key highlights from the PwC report include:

  • Most countries in Africa tend to apply a single tier system of VAT, which, if properly administered is better than sales or turnover tax, as it leaves an audit trail;
  • South Africa’s banking system could face higher VAT costs in the wake of new regulations;
  • State owned entities need to include VAT compliance in their strategic planning activities and where necessary, be prepared to defend business and VAT decisions from tax officials;
  • There is a general trend for tax authorities to take a more aggressive approach to compliance and penalties are reflective of this;
  • All countries with a VAT regime are now using automation to some degree.
Published in Tax
Tuesday, 06 November 2012 12:24

Re-inventing growth for survival

Re-inventing growth for survival

The whole world is obsessed with the idea of growth. The perception is that if we don’t grow we somehow stagnate, we ‘rust’ or go backwards, becoming lesser peoples or nations. Given, however, that compound growth is not even possible over lengthy periods, why this absolute fixation on growth? Is growth truly the ‘be all and end all’, the panacea, to all the world’s woes?

Since many of the solutions proposed following the Global Financial Crisis (the ‘great recession’) are unlikely to be sustainable, “so much of what we simply take for granted will be challenged” says Glenn Silverman, Chief Investment Officer at Investment Solutions. As such, a far more balanced, or nuanced, understanding of growth is called for. Capitalism has proven to be the best economic system there is, but it too has its flaws. As such a more sustainable version of Capitalism is called for, one that focuses on sustainable growth, not growth at all costs.

Despite all the hype around repeated bouts of Quantative Easing along with ongoing European Central Bank initiatives, the ‘great recession’ and its aftermath is still with us.

“Millions who were retrenched remain unemployed, hundreds of smaller US and other banks have closed down. Zero Interest Rate Policies (‘ZIRP’) are in play in most of the West and Japan. Japan itself is now in its second decade of recession with no end in sight. Government and central bank balance sheets, in the West and Japan, are in a deplorable state, with financial repression now an increasing and disturbing reality” explains Silverman.

In the face of this, the governments of the day, supported by their cronies, the central bankers, continue to preach the message that if the world could only get (massive) growth going again - all will be well. Since, however, “it was massive unsustainable excess, especially with respect to debt, that created the conditions for the great recession, it’s hardly likely that this can also be the cure” adds Silverman. Or, put another way, if debt-driven growth was the cause of the problem, then more debt is unlikely to be the solution.

As such, in a world of deleveraging, achieving any (non-debt driven) growth, let alone strong, and sustainable growth, in the West or Japan, seems highly improbable. Far more likely outcomes in these regions would be;

  • increased taxation (both in terms of percent, and spread),
  • more regulation and increased government interference,
  • financial repression in the form of capital controls, prescribed assets etc,
  • increasingly creative accounting and brazen manipulation of rates and markets – already the hallmark of Western economic policy,
  • an increasingly challenged welfare state, especially in Europe, where promises made by governments to electorates can no longer be afforded or met.

'Default' in some form or another is the likely outcome. “This may be of the official kind – which is the least likely, if you consider that Greece has apparently not defaulted over the past two years, or through inflation – as the debt numbers, and the associated central bank actions simply become too large” says Silverman.

Or, put another way, in a world of zero short-term interest rates (and promises by the likes of the US Federal Reserve to maintain these until 2015), with the ‘safe haven’ government bond yields already forced lower through Quantitative Easing and trading well below both current and future expected inflation levels, the whole fixed income market is (openly) manipulated, unattractive, and vulnerable.

In spite of this, today, markets appear as calm as a lake. Indeed, it appears as if the enormous firepower of the US Federal Reserve, the European Central Bank, the Bank of Japan and the Chinese have achieved their desired outcomes. But can this be sustained? Will the more recent cycle not simply be repeated – with yet more creative measures introduced following further sell-offs – but with sustainable growth remaining elusive.

Only time will tell what the unintended consequences of these enormous unconventional debt-driven measures will be. Many commentators talk of the return of inflation, the more bold, of hyper-inflation. Until then Silverman suggests “one keeps ones radar on and ones antennae alert to danger as, whilst the current positive momentum may continue for a while, the unsustainable fundamentals are likely to re-assert themselves.”

Until the world is set on a more sustainable path to growth, an environment of volatility, slow or no growth (in the West and Japan), and repeated debt-induced crises will likely characterise the world for years to come.

Let no one say they weren’t alerted!

Published in Trade & Investment
Thursday, 11 October 2012 00:00

South African business confidence stalls in continued global business volatility

South African business confidence stalls in continued global business volatility

A sharp decline in business confidence in many rapid growing economies is raising a warning flag that global business may face continued volatility for some months to come. In South Africa, confidence levels have remained largely unchanged, dropping one point in the Regus Business Confidence Index (from 117 to 116) since April 2012.


Business confidence in some of the world’s leading growth economies has dropped significantly over the last six months. Despite the fall, levels of business confidence in rapidly growing economies still remains well ahead of levels in mature economies – yet this setback should act as a warning flag for businesses across the world to stay nimble and expect further volatility before a general global upturn, finds the latest Regus Business Confidence Index (BCI) based on the views of more than 24,000 senior business people from 92 countries.


In South Africa, the Business Confidence Index rating is lower for small businesses (111) than for large firms (132)and, given the important role of small and medium-sized enterprises as an engine of growth and provider of jobs, this finding is of particular concern. Access to affordable credit and cash-flow management were among their biggest concerns, highlighting the need for flexible, pay-as-you go business services allowing businesses to remain flexible and agile.


Key Findings and Statistics


  • Global confidence levels have shown little change compared to six months ago; down 2 percentage points to 111 since April 2012.
  • The proportion of South African companies reporting revenue increases improved slightly at 50% compared to 43% in April 2012; profits did not change at all (39%);
  • Only just over a quarter (29%) of South African respondents reported they were satisfied their government’s support strategies for business;
  • The following issues are major challenges to small businesses and start-ups:
    • cash-flow (67%)
    • sales (30%)
    • administrative tasks (26%)
  • Respondents also highlighted key measures for government to introduce that would substantially help small businesses and start-ups. These are:
    • tax exemptions (71%)
    • low interest loans (61%)
    • mentoring schemes (36%)


It’s clear that there’s been a stagnation in business confidence, accompanied by significant falls in some rapidly developing economies since our last BCI report in April. This suggests that slowing trade with Europe and Western economies, combined with a host of national factors, is taking its toll. In South Africa, unrest in the mining sector is expected to affect production and demand, but also allowing the central bank to keep interest rates low.


We were particularly struck by slower improvement amongst entrepreneurs and small businesses. In order to improve their cash situation, respondents identified affordable and flexible business services – especially for overheads such as workspace, administrative support and sales/marketing. 45% of respondents, for instance, reported that one of the major burdens during the downturn has been inflexible property leases. Flexible services allow businesses to be more agile and free-up cash for investment without relying on credit at a time when it is so difficult to secure.

Published in Economy
Tuesday, 24 July 2012 16:54

The tricky issue of the youth unemployment subsidy and combating unemployment in South Africa

The tricky issue of the youth unemployment subsidy and combating unemployment in South Africa

Unemployment is not only a South African problem, and it has been exacerbated by the recent economic crises which saw half of the 1.9 million jobs created before the crises, lost in the country's first recession in almost 20 years. France, Germany, Spain and the United Kingdom have all implemented new measures over the last two years. Several countries with smaller economies have adopted wage subsidies in light of rising unemployment during the global economic crisis, including Chile, Korea, Mexico, the Slovak Republic and Turkey. The policies in Chile and Turkey have been specifically targeted towards younger workers.

The reason why the level of employment is high amongst the youth is due to that fact the there are few jobs that are available and the jobs that are available require a specific skill set which the youth do not possess. The only way that they are going to acquire these skills is if companies are prepared to take these individuals on and train them. This would obviously incur additional costs for employers but this could be offset by the subsidy that they would receive for employing these individuals. In an economy where skills are in short supply it is imperative that employers start looking to use the current workers that have with the necessary skills to train our youth to ensure continuity in the future. The skilled workers employers currently have will one day exit the workplace and with them will go all the knowledge and skills. Employers need to start planning today for this inevitable event and ensure that their businesses are able to continue indefinitely by facilitating the transfer of skills and knowledge to the youth of today.

The new Youth Wage Subsidy proposal is for the South African National Treasury to implement a R5-billion youth employment subsidy, which would compensate employers for taking on young employees for 12 or 24 months. The subsidy aims to compensate employers to offset the costs of training or risk incurred, especially for small enterprises as it gives them access to cheaper labour. So it is intended to be a win - win situation for employers as well as work seekers. It is planned to work through the Pay As You Earn (PAYE) tax system and to qualify, individuals will have to be aged between 18 and 29 and their salary will need to fall below the personal income tax threshold. It is estimated that 178 000 new jobs can be created at a cost of R28 000 per job.

Recently, Finance Minister Pravin Gordhan stated that unemployment was a serious problem in South Africa and that R150 billion had been set aside to create more jobs. Only 41% of South Africans are employed and this is most evident amongst the youth below 25 years old, where approximately only 50% are employed. This is far less than the global average for emerging nations where the figure for employment is in the high fifties, sixties and even 70 percent. In order for South Africa to achieve the global average of around 56%, 5 million more people will need to be employed.

However, arguments against the proposal are that employees will lay off existing workers to take on subsidised ones in order to save costs. They argue that this will also lead to wage lowering by effectively sourcing cheap (subsidised) labour. The argument goes further to say that the idea does not guarantee that training and skills development will take place in the workplace, and that this will lead to inexperienced individuals being abused and 'recycled' through the system of labour brokers and employers without training as well as being fired when the subsidies end.

It would seem that the simple act of working as an employee in any industry would constitute training and experience to further better the candidates possibility of finding other or higher earning positions and proponents of the policy argue that it will relieve unemployment amongst the youth, stimulate the economy and that many businesses will find it self defeating to fire good, skilled employees.

It is clear however, that it would not make sense for every employer to become involved in the youth employment subsidy. Employers would need to examine their workforces and identify those employees who skills are scarce and who may be nearing retirement age. It would be these types of positions that would make it feasible for an employer to consider partaking in the subsidy scheme. There would therefore need to be qualifying criteria by an employer before they could be considered for the subsidy scheme. The effect on this scheme would have on the number of unemployed youth would depend on the willingness of employers to partake in the scheme and the willingness and determination of the youth to genuinely want to learn a specific skills set. This cannot be regarded as a welfare or charity scheme in order to give money to unemployed individuals and this will always remain the risk of implementing such a scheme.

Amongst all the back and forth between proponents and detractors of labour brokers, youth subsidies and BEE policies, we are still left with a very real unemployment problem that needs to be dealt with. Despite making up just 0.5 per cent of the global labour force, South Africa accounts for 2 per cent of global unemployment.

Needless to say, doing nothing will only keep us where we are and possibly see the situation slide backwards. Currently the employment growth rate is quite sluggish, not initiating some or other effective solution only means it will remain this way while the high unemployment rate means employers are still able to decrease wages and exploit desperate work seekers. One thing is definite though, some action needs to be taken in order to combat the plight of the unemployed in the country and the youth subsidy policy seems like a good place to start.

Tuesday, 10 July 2012 14:08

Grant Thornton Cape Town partners and staff join Mazars

Hilton Saven

Global audit, tax and advisory firm Mazars announced today that 6 partners, two consultants and more than 60 staff members from Grant Thornton Cape Town will join Mazars effective 1 August 2012. 

Mazars has more than 13,000 professionals in 69 countries, in addition to correspondents and joint ventures in a further 15 countries. As at 31 August 2011, Mazars’ Group turnover was €956.7 million. The move will increase Mazars’ staff nationally to more than 750 and result in a turnover in excess of R350 million. 

The team joining Mazars is the original Grant Thornton team that merged with BDO Cape Town two years ago and practiced under the Grant Thornton name. That merger has been unwound, and the original Grant Thornton practice will now merge with Mazars. 

“We’re delighted to welcome such an exceptional group of professionals into the Mazars family, and are confident that our cultures, values and strategic visions will merge seamlessly,” says Hilton Saven, National Chairman of Mazars South Africa and Co-CEO of Mazars International. “Their business mirrors ours remarkably in many ways, and will strengthen our offering across the board.”

Saven says the merger has been enthusiastically welcomed at international level, and is seen as an important development in its strategy of combining both organic and external growth.

Neil Miller, Joint Managing Partner of Grant Thornton Cape Town, who will join Mazars as a Partner says that the partners and staff are excited at the prospect of working with the calibre of professionals that Mazars offers: “We are all firmly of the belief that it is in the interest of all stakeholders in our business and, most importantly the clients, that we work in a strategic direction that places people and values at its core to enable us to develop and grow our service offering.”

In addition to Miller, the partners joining Mazars are Danny Naidoo, Mike Teuchert, David Smith, Larry Auret and Melanie Odendaal. Retired partners David Wener and Deryck Woolley will also join as consultants. The new partners and staff will be integrated into Mazars’ Cape Town based office in Century City.



Published in Tax

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